Element79 Gold (CSE:ELEM) has provided a notice of force majeure to Condor Resources (TSX-V:CN) to temporarily suspend payment obligations under the Lucero Project agreement with its subsidiary Calipuy Resources.
Element79 says it remains committed to advancing Lucero and developing the project into a commercially viable mining operation. The company is in the process of pursuing alternatives to push the project forward and work collaboratively with stakeholders to end the force majeure event.
In December 2020, Condor entered into a deal with Calipuy, whereby Calipuy would purchase Condor’s wholly owned Peruvian subsidiary, Minas Lucero del Sur SAC, which owns the Lucero Project.
The consideration for the project totalled US$3.5 million and is payable in five years.
If the price of gold exceeds US$2,500 per ounce at the time of final payment, the consideration will increase to US$4 million and if the price of gold exceeds US$3,000 per ounce at the time of final payment, the total consideration will increase to $6 million.
Calipuy had paid US$465,000 before Element79 acquired the company and assumed its payment obligations in June 2022. Condor received 250,000 Element79 shares, as part of the payment.
Element79 says the company has faced significant difficulties in advancing the project since acquiring Calipuy in 2022.
Due to conflicts with local communities, delays on relevant legislative and policy approvals, and municipal inaction preventing the enforcement of the mineral claims, Element79 has been unable to access the project and performance exploration or commercial mining operations.
As such, the company has provided a notice to suspend payment obligations until the sooner of the end of the force majeure event or 24 months from the date of the notice.
The company is uncertain as to when the force majeure event will cease.
A force majeure event is an unforeseen and uncontrollable circumstance that prevents someone from fulfilling their contractual obligations.
Element79 Gold Corp is a mining company focused on exploring and developing gold and silver assets.
The company’s key asset is the past-producing Lucero Project in Peru, where it aims to resume operations through conventional mining and tailings reprocessing.
The Lucero Project, covering 67km2, is considered an epithermal deposit located in the Chila Mountain Range in southern Peru.
Write to Aaliyah Rogan at Mining.com.au
Images: Element79 Gold Corp
